N11427
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 33 OF 2023

BETWEEN
G & M FLORES LTD
Plaintiff

AND
PHA HEALTH ASSURANCE COMPANY LTD
Defendant

LAE:	TOLIKEN J
24 JULY 2025

PRACTICE AND PROCEDURE – motion to strike out defence – motion for summary judgment – whether relevant requirements established – requirements satisfied - defence struck out – summary judgment entered – National Court Rules, Order 8 Rule (1),(2); Order12 Rule (1). 

Cases cited
Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112
White Corner Investments Ltd v Haro (2006) N3089
Lero v Stagg (2006) N3050
Gari v Motor Vehicle Insurance Limited, Unreported and Unnumbered (June 2005)
 
Counsel
B. Tomake, for the plaintiff
No appearance by or for the defendant

RULING ON MOTION

1.	TOLIKEN J:	By Notice of Motion dated 30th July 2025, the Plaintiff, G & M Flores Hospital Ltd, principally sought the following orders against the Defendant PHA Assurance Co. Ltd:

1)	That the defence filed on 06th April 2023 be struck out for failing to disclose a vaid defence pursuant to Order 8 Rules 1 and 2 of the National Court Rules.

2)	That summary judgment be entered for the Plaintiff with damages to be assessed pursuant to order 12 Rule 38(1) of the National Court Rules.
BACKGROUND
2.	The Plaintiff operates a hospital in Lae providing various health and medical services.

3.	The defendant is a Third-Party Insurance Administrator engaged in cases and claims administration for its clients. It has recently undergone a name change to Coco Assurances Ltd.

4.	The defendant initially engaged the services of the plaintiff as medical service provider for its clients. At that time the defendant operated in partnership with an insurer called Fullerton Health in a joint venture called PHA Fullerton. The venture ended sometime in 2021. 

5.	On 20th December 2021, the defendant proposed in writing for a new Service Agreement with the plaintiff to ensure continuation of coverage for its clients.

6.	On 01st January 2022, the parties entered into a new Service Agreement for an indefinite period, subject to a termination clause.

7.	The plaintiff agreed and contracted to provide appropriate and pre-approved medical services to the defendant’s insured members. The defendant contracted to pay for the plaintiff’s services.

8.	On 22nd January 2022, the defendant installed one of its employees at the plaintiff’s hospital to undertake the following tasks:

(1)	 Check Claim Forms for insured members
(2)	  Give approvals before treatment
(3)	  Give post-treatment approval of invoices to the plaintiff.
    
9.	On 2nd February 2022, the defendant requested the plaintiff to subject its members with cough and flu-like symptoms to Covid testing, which was not part of their Agreement.
10.	On 22nd March 2022, agreed that Covid screenings will not be done until the Agreement is amended to accommodate that. Eventually no amendment was ever done.

11.	The plaintiff faithfully rendered services to the defendant issuing invoices for the months of January to May 2022.

12.	On 3rd May 2022, the plaintiff wrote the defendant demanding the settlement of outstanding invoices totalling K686, 834.20.

13.	 By letter dated 4th May 2022, the defendant’s Country Managing Director, Mr. John Elisa terminated the Agreement with immediate effect. He made an undertaking that the defendant will settle all outstanding invoices in due course.

14.	On 27th June 2022, Mr. Elisha wrote the plaintiff and further undertook on behalf of the defendant to settle the outstanding invoices for January, February and March 2022.

15.	On 24th August 2022, the plaintiff’s Lawyers wrote the defendant seeking settlement of the February, March, April and May 2022 invoices by 27th September 2022.

16.	Mr. Elisa responded, stating that the non-payment was an oversight and that the actual amount owed was K560,373.33. He further asked for extension of time and for instalment payments. 

17.	 It appear that the plaintiff agreed with the revised sum because when the defendant defaulted from its undertakings the plaintiff commenced proceedings claiming the sum of K560,373.00, economic loss, interests and costs.

 DEFENDANT’S DEFENCE
18.	The defendant filed its defence on 06th April 2023. It does not deny that it entered into a Service Providers Agreement with the plaintiff for the provision of health and medical services to its insured members. 

19.	While it denies liability, the defendant does not plead whether it has paid any of the plaintiff’s outstanding invoices.

ISSUES

20.	What falls to be determined are these:

1.	Whether the defendant’s defence should be struck out?
2.	Whether summary judgment ought to be entered against the defendant.

A.	Whether Defence Should be Struck out.

21.	The power to strike out a defence is vested in the Court by Order 8 Rule 27 which provides:

27. Embarrassment etc.

(1)	 Where a pleading – 
(a)	discloses no reasonable cause of action or defence or other cause appropriate to the nature of the pleading, or
(b)	 has a tendency to ca use prejudice, or delay in the proceeding, or
(c)	 is otherwise and abuse of process,
 the court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the proceedings be struck out.
(2)	The court may receive any evidence on hearing on an application for an order under sub-rule (1). 

22.	I have read the plaintiff’s supporting evidence and considered Mr. Tomake’s submissions, and the authorities counsel cited to support the Motion to strike out the defence. (Vari Gari v Motor Vehicle Insurance Limited, Unreported and Unnumbered (June 2005) followed by Gabi J in White Corner Investments Ltd v Haro (2006) N3089; Lero v Stagg (2006) N3050).

23.	On the evidence before me, the defendant has clearly admitted to owing the plaintiff K560,373.33, a sum ratified implicitly by the plaintiff by not challenging it when the matter was put to it by Mr. Elisa. The defendant had made several undertakings to settle the debt and further sought extension of time to pay and even offered to pay by instalments. (See the Affidavits of Luke Vava filed 30.06.25, Annexure “A” and “B.”).

24.	Now in the face of these admissions the defendant inexplicably denies liability. Clearly the defendant’s defence does not disclose a defence at all. Its denial is aimed at delaying these proceedings, and at best, embarrass the plaintiff’s efforts to recover its debt.

25.	The defendant’s defence therefore ought to be struck out.

B.	Whether Summary Judgment Should be Entered
 
26.	Pursuant to Order 12 Rule 38 NCR, summary judgment may be entered against a defendant. 

27.	The Rule provides that on application by a plaintiff, in  relation to any claim for relief  where  there is evidence supporting the claim, or part of it, and  there is evidence by the plaintiff or a responsible person, that  in the belief of such a person the defendant has no defence to the claim or part  of it, the court may direct entry of judgment with damages to be assessed.

28.	There are two requirements to be satisfied here. First, there must be evidence of the facts proving the essential elements of the claim, and second, the plaintiff or some responsible person gives evidence that in his belief the defendant does not have a defence. (Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112).

29.	There is evidence from the plaintiff’s Financial Controller Mr. Rodney Bautista pertaining to the debt incurred by the defendant from unpaid invoices for the months of January, February, and March 2022 for services rendered by the plaintiff.  There is evidence of written unfulfilled promises and undertakings of payment by Mr. by Mr. Elisha. (See Affidavit of Mr. Rodney Bautista, filed on 06.12.24, Annexure L, and Mr. Luke Vava’s affidavit earlier referred to) This a claim for the recovery of a simple debt arising out of a breach of a contract between the parties for the provision of health and medical services by the plaintiff to insured members – clients of the defendant. 

30.	With the striking out of the defendant’s defence, it is not necessary to consider the second requirement.
 
31.	Summary judgment shall therefore be entered against the defendant.

ORDERS
32.	The Court makes the following orders:

1.	 The defendant’s defence filed on 06th April 2023 is struck out for not disclosing a valid defence.
2.	Summary judgment is entered for the plaintiff with damages to be assessed.
3.	Costs shall be in the cause. 
________________________________________________________________
Lawyers for the plaintiff: 	Luke Vava Lawyers